The Best Dividend Stock - If I Could Only Own One
Interest rates are low. We here this every single day as if we didn't know that already. Why not take advantage of the low interest rates instead of complaining about them? No, I am not talking about bonds. I am talking about preferred shares. The iShares S&P US Preferred Stock Index Fund (PFF) to be exact. Yes, the name is a mouthful. The yield is even bigger. PFF yields a juicy 7.32%.
There is another benefit. PFF pays out monthly dividends, so if you are reinvesting your profits it makes compounding that much greater. Preferred shares are corporate shares that trade similar to bonds because of their stated yields. They do not having voting rights like common stock. In many cases they are less liquid than common stocks therefore a little more difficult to trade. That's why I would choose this ETF. PFF gives you a basket of 93 holdings to spread your risk. Be aware that most of these holdings are financials so you will be increasing your exposure in that sector.
In a world where interest rates are low take advantage of them. When they rise it will hurt the performance of this fund. However with rates likely to stay low for a while longer you still have time to profit nicely from PFF.
Disclosure: Long PFF